Taxing informal sectors. Complicated questions and simplified regimes

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How effective are the most common approaches to taxing informal sectors? What does the available evidence tell us about their implications for revenue administration, efficiency, and equity? What are the key issues to consider for reform or for developing new approaches? 

The informal economy is often framed as an untapped source of tax revenue, and governments frequently prioritise its taxation as a means to broaden the tax base. Yet approaches such as simplified tax regimes and mass registration campaigns have shown weak performance in revenue collection and raised questions about fairness and equity. 

The first webinar of the Tax and informality series by ICTD and the ATI will provide a wider introduction to recent research and evidence on the taxation of informal sectors in lower-income country contexts. It will draw on recent studies from various country contexts with a focus on policy relevance and the key questions that revenue administrations face in relation to taxing the informal sectors. The discussion will also include perspectives from researchers, policymakers and civil society working actively with informal sector workers. 

Objectives 

The objective of the webinar is to examine the evidence on the most common methods of taxing informal sectors and consider its implications for revenue administration. 

The webinar will explore what data exists to date about the track record of the most common methods of taxing informal sectors, what the implications of this data are for revenue administration from an efficiency and equity perspective, and what key issues should be considered for reform and innovation in this area. 

Programme